When economic slowdown knocks the doors, it is most important for marketers to identify the needs of the middle class shopper with limited disposable income. It becomes important to understand buying patterns, the preferred format of convenience stores and supermarkets, and the discounts and promotions that influence the buying-behaviour. Deals and promotions are important elements but shoppers also derive value from the ease of access to the brands and in-store shopping experience.
Shopping behaviour is changing in India and shoppers of FMCG products are behaving differently due to the emergence of new, especially big box modern formats. The last five years have seen a rise in the penetration of hypermarkets. India is likely to emerge as the most exciting growth market for international hypermarket operators in a few years.
However, modern trade contributes to below eight percent of all retail trade in India and the country has only six modern trade stores per million. This is a function of store penetration, not channel adoption. According to a report published by AC Neilsen, the top 17 metros in India contribute to 73 per cent of the country’s modern trade business. In the same geographies, modern trade contributes to a third of total retail. It plays a critical role in the beverage market as well.
It has been observed that hypermarkets are most conducive towards inducing category adoption and brand switch. Nowadays, shoppers shop at multiple formats and the percentage of trade that happens out of modern trade is far lower than the percentage of shoppers who shop at these stores. All of these shoppers are likely to experience an unconscious change in their behaviour. This change in behaviour is manifested in the form of category adoption and, or a switch in brand preference. Once altered, category and brand preferences are unlikely to change when shoppers visit their neighbourhood hole-in-the-wall, dimly lit, highly cluttered mom-and-pop store.
In order to discover how shopper behaviour has changed in India, as shoppers move from bargaining at mom-and-pop stores to seeking a bargain at hypermarkets, a robust study was conducted by the country’s top-ranked business management school – The Indian Institute of Management, Ahmedabad (IIM-A), TNS, KiE Square and OgilvyAction. They picked two hypermarkets, Big Bazaar and HyperCITY, one at each end of the value spectrum. Big Bazaar, which is India’s largest hypermarket chain known for great deals, highest offers and discounts and HyperCITY with complete with swanky interiors, finest shopping experience and less discounts was chosen with special focus on three urban cities: Mumbai, Delhi and Bangalore and nine categories across food and personal care: chocolates, chips, carbonated soft drinks, health food drinks, breakfast cereals, hair care, oral care, soaps.
The sample included over 6000 shoppers, 3300 buyers and 2700 exit interviews with over 450 hours of video footage. Two shopper research techniques were followed, namely, discreet shopper observation through physical observers and cameras put up in each of the above categories and exit interviews. This helped in building a shopper predictive model called Store Trek.
It led to an extensive study that covered aspects of physical behaviour, which means what percentage of a category’s shoppers and buyers are likely to touch, smell, pick up, read, check prices, check brands, check variants and so on. It can also give purchase decision hierarchies for categories, impulse versus planned sales, time and money spent by shoppers, store visit frequencies, shopping missions, top brands shopped by category, videos demonstrating physical behaviour, role of co-shoppers, basket size, cross-category associations and percentage of grab-and-go shoppers. Store Trek made all this information available on a single-page screen.
Some of the key insights gathered from Store Trek include:
• Most brand advertising must talk to women. This ensures they are pre-decided on brand before entering the store
• Women who shop with their spouse, spend 30 – 50 per cent more than when they shop alone
• On an average, shoppers spend 2 to 4 minutes on each category
• Men who accompany their spouses read product literature the most
• The categories that are most read by people are biscuits, cereals, chocolates, chips and hair care
• The more you can get shoppers to browse, the more they will buy
• People who shop alone, browse the most and buy the least
• Shoppers spend the most amount of time in the chocolate aisle
Apart from the various researches on buying behaviour of consumers that pinpoint details of the customer experience while shopping, deal-weeks, giant sale occasions to stimulate large-scale buying, right product and packaging mix and appropriate channel, this study explored much more than the usual trends of shoppers.